10-KPeriod: FY2017

UNITED PARCEL SERVICE INC Annual Report, Year Ended Dec 31, 2017

Filed February 21, 2018For Securities:UPS

Summary

UNITED PARCEL SERVICE INC (UPS) filed its 2017 10-K on February 20, 2018. The company reported significant revenue growth of 8.2% to $65.87 billion, driven by strong performance across all segments: U.S. Domestic Package, International Package, and Supply Chain & Freight. Net income increased substantially by 43.1% to $4.91 billion, with diluted earnings per share rising to $5.61. This strong financial performance was bolstered by a considerable reduction in pension mark-to-market charges and strategic investments in network expansion and service enhancements. UPS highlighted increased capital expenditures to support demand, including investments in automated facilities and its air network capacity. The company's strategy focuses on providing integrated logistics solutions and expanding its global reach through strategic acquisitions and joint ventures, such as the significant joint venture with SF Express in China and acquisitions in the European market. UPS also continues to invest in technology to improve operational efficiency and customer experience. The report also noted a 10% increase in the quarterly dividend to $0.91 per share, along with ongoing share repurchase programs, signaling a commitment to returning value to shareholders.

Financial Highlights

54 data points
Beta

Revenue

$65.87B

Net Income

$4.91B

7.4% Net Margin

EPS (Diluted)

$5.61

Total Assets

$45.57B

Cash & Equivalents

$3.32B

Free Cash Flow

-$3.75B

Financial Statements
Beta
Revenue$65.87B
Operating Expenses$59.06B
Operating Income$7.53B
Interest Expense$453.00M
Net Income$4.91B
EPS (Basic)$5.63
EPS (Diluted)$5.61
Shares Outstanding (Basic)871.00M
Shares Outstanding (Diluted)875.00M

Key Highlights

  • 1Total revenue increased by 8.2% to $65.87 billion in 2017.
  • 2Net income saw a significant increase of 43.1% to $4.91 billion.
  • 3Diluted earnings per share grew by 45.0% to $5.61.
  • 4Average daily package volume increased by 4.9%, indicating strong demand.
  • 5Operating profit increased by 37.7% to $7.53 billion, partly due to a $1.85 billion reduction in pension mark-to-market charges.
  • 6UPS continued to invest in growth, announcing significant capital expenditures and strategic acquisitions in key markets like China and Europe.
  • 7The company increased its quarterly dividend by 10% to $0.91 per share.

Frequently Asked Questions

UPS's revenue growth in 2017 was driven by a combination of factors including shipment volume growth across all operating segments, yield expansion (revenue per piece), and the benefits realized from strategic investments in network expansion and service portfolio initiatives.

In 2017, UPS recognized pre-tax mark-to-market losses of $800 million related to its pension and postretirement defined benefit plans. However, the company's overall operating profit and net income were positively impacted by a significant reduction in these charges compared to the previous year, contributing to the substantial year-over-year increase in profitability.

UPS's international growth strategy involves expanding its integrated global network and service portfolio. This includes forming joint ventures, such as the one with SF Express in China, acquiring companies in key European markets like Ireland and the UK, and investing in infrastructure to reduce transit times and improve services in high-growth regions like Asia.

UPS is returning value to shareholders through a combination of increased dividends and share repurchases. The company announced a 10% increase in its quarterly dividend to $0.91 per share and continued to execute its share repurchase program, with plans to repurchase approximately $1.0 billion of shares in 2018.